DDA's land pooling policy: Will it dampen property prices in NCR?

DELHI: Can runaway property prices in Gurgaon and Noida be reined in? That could happen with about 40,000 acres of land expected to come into the market because of Delhi's new land-pooling policy. This could mean some 1.5 million apartments will be launched over the next three-four years in the city, possibly having an impact on the appreciation in the value of property in the wider National Capital Region, which includes Gurgaon and Noida.

The policy announced by the Delhi Development Authority recently is aimed at freeing up land and ensuring infrastructure is in place before construction of homes begins in newer areas of the city that are residential zones under the city's master plan.

Landowners can pool their land for development by the city's land-owning agency. But instead of being compensated when the government takes over the land, the owners will get 48-60% of it back after the authority has set up the infrastructure.

The owners will be allowed to build on this land themselves or give it to real estate developers. The Master Plan of Delhi 2021 envisages development of several hundred acres of land for accommodating an additional population of 48 lakh by 2021, up from the current 1.6 crore. "More homes and planned development would mean prices will come down," said a senior DDA official who did not wish to be named.

Importantly for the authority, this will be an alternative to the compulsory land acquisition and disposal process, he said. The new land acquisition bill that has been recently passed by the Parliament will make it difficult to acquire land, he added.

The new policy will arrest the sharp rise in property prices in NCR areas such as Gurgaon, Noida and Ghaziabad, said Gaurav Jain, a town planner and managing director of land consultancy Samyak Properties & Infrastructure. Prices of residential property on the Dwarka Expressway in Gurgaon, for instance, have seen a 150% increase in prices in the last five years, according to property consultancy DTZ.

It will be a few years before the first projects are launched under the policy and at the moment clarifications are awaited. It will certainly have a calming effect on the NCR market and Gurgaon will no longer be an investors' haven as it is now," said Anckur Srivasttava, chairman of GenReal Property Advisers.

Importantly for the authority, this will be an alternative to the compulsory land acquisition and disposal process, he said. The new land acquisition bill that has been recently passed by the Parliament will make it difficult to acquire land, he added.

The new policy will arrest the sharp rise in property prices in NCR areas such as Gurgaon, Noida and Ghaziabad, said Gaurav Jain, a town planner and managing director of land consultancy Samyak Properties & Infrastructure.

Prices of residential property on the Dwarka Expressway in Gurgaon, for instance, have seen a 150% increase in prices in the last five years, according to property consultancy DTZ.

To be sure, it will be a few years before the first projects are launched under the policy and at the moment clarifications are awaited.

"It will certainly have a calming effect on the NCR market and Gurgaon will no longer be an investors' haven," said Anckur Srivasttava, chairman of GenReal Property Advisers.

Property prices in the satellite cities will not see the same kind of rise as in the last few years, he said. From a buyer's point of view, it will be an opportunity to acquire property in Delhi, he said.

Satellite cities mushroomed around Delhi in the last two decades largely because of the restrictive nature of development in the city. DDA mostly developed small patches of land and auctioned homes, creating a substantial demand-supply mismatch.

Not everyone is convinced the move will lead to prices easing. The opening up of new areas isn't likely to have too much of an impact, said Mohit Gujral, chairman of DLF Universal. While Gurgaon and Noida may have initially flourished because of sparse availability in Delhi, the NCR cities now have a life of their own and are economic centres themselves.

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